ROMANIA - The two largest funds in the Romanian second pillar will not be handed new clients from the pensions default pool over the next two years, the local regulator has decreed.
The Romanian pensions system is set up to randomly choose a pension fund for people to join, if they have not made an active choice as to which pension fund they wish to join within four months of starting work.
However, the supervisory authority CSSPP has now ruled that pension funds which already have more than 20% of the market share by the number of participants will not gain any new members from this pool over the next two years, starting January.
"The main reason is to prevent and limit the risk of too much concentration in the market," explained Dan Zavoianu, spokesman for the CSSPP.
Two funds currently exceed this mark and will therefore be excluded from the default distribution pool.
ING had a market share of 33.86% at the end of June followed by AZT Viitorul, a fund run by Allianz-Tiriac, with 25.58%. (See earlier IPE article: Romanian pensions deliver 18.7% in 12 months
Commenting on the move, one market participant said: "The two largest funds are unhappy about this new regulation and it has caused discussion."
However, the CSSPP also said this measure was intended to increase people's active choice.
Zavoianu stressed that people remain free to actively choose any of the 12 funds in the Romanian second pillar pensions regime.
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